Inheritance Tax Act 1984

[F1 PART 2 U.K. Supplementary

Textual Amendments

F1 Sch. A1 inserted (with effect in accordance with Sch. 10 para. 9 of the amending Act) by Finance (No. 2) Act 2017 (c. 32), Sch. 10 para. 1 (with Sch. 10 para. 9(2))

Disposals and repayments U.K.

5 (1) This paragraph applies to— U.K.

(a) property which constitutes consideration in money or money's worth for the disposal of property to which paragraph 2 or paragraph 3(a) applies;

(b) any money or money's worth paid in respect of a creditor's rights falling within paragraph 3(a);

(c) any property directly or indirectly representing property within paragraph (a) or (b).

(2) If and to the extent that this paragraph applies to any property—

(a) for the two-year period it is not excluded property by virtue of section 6(1), (1A) or (2) or 48(3)(a), (3A) or (4), and

(b) if it is held in a qualifying foreign currency account within the meaning of section 157 (non-residents' bank accounts), that section does not apply to it for the two-year period.

(3) The two-year period is the period of two years beginning with the date of—

(a) the disposal referred to in sub-paragraph (1)(a), or

(b) the payment referred to in sub-paragraph (1)(b).

(4) The value of any property within sub-paragraph (1)(c) is to be treated as not exceeding the relevant amount.

(5) The relevant amount is—

(a) where the property within sub-paragraph (1)(c) directly or indirectly represents property within sub-paragraph (1)(a) (“the consideration”), the value of the consideration at the time of the disposal referred to in that sub-paragraph, and

(b) where the property within sub-paragraph (1)(c) directly or indirectly represents property within sub-paragraph (1)(b), the amount of the money or money's worth paid as mentioned in that sub-paragraph.

Tax avoidance arrangements U.K.

6 (1) In determining whether or to what extent property situated outside the United Kingdom is excluded property, no regard is to be had to any arrangements the purpose or one of the main purposes of which is to secure a tax advantage by avoiding or minimising the effect of paragraph 1 or 5. U.K.

(2) In this paragraph—

• “tax advantage” has the meaning given in section 208 of the Finance Act 2013;

• “arrangements” includes any scheme, transaction or series of transactions, agreement or understanding (whether or not legally enforceable and whenever entered into) and any associated operations.

Double taxation relief arrangements U.K.

7 (1) Nothing in any double taxation relief arrangements made with the government of a territory outside the United Kingdom is to be read as preventing a person from being liable for any amount of inheritance tax by virtue of paragraph 1 or 5 in relation to any chargeable transfer if under the law of that territory— U.K.

(a) no tax of a character similar to inheritance tax is charged on that chargeable transfer, or

(b) a tax of a character similar to inheritance tax is charged in relation to that chargeable transfer at an effective rate of 0% (otherwise than by virtue of a relief or exemption).

(2) In this paragraph—

• “double taxation relief arrangements” means arrangements having effect under section 158(1);

• “effective rate” means the rate found by expressing the tax chargeable as a percentage of the amount by reference to which it is charged.]